Killer Corruption

According to the United Nations Office on Drugs and Crime, up to 25% of global procurement funding is lost to corruption. With billions of dollars flowing into developing countries to support their COVID-19 responses, there is an urgent need to ensure that the money goes where it is intended.

WASHINGTON, DC – COVID-19 is a ticking time bomb in Africa. Some of the risks are widely documented. Health-care systems are weak and overburdened, with ten African countries reportedly having no ventilators at all. Food supplies are unstable, and have already suffered major disruptions. And over 18 million people are refugees or internally displaced, leaving them especially vulnerable. But another major obstacle to effective COVID-19 responses is being largely overlooked: widespread corruption.

The international community is stepping up to help Africa fight the pandemic. The International Monetary Fund has suspended 25 (mostly African) countries’ debt payments for the next six months. The World Bank Group is making available a package of up to $12 billion in immediate support to assist developing countries in coping with the outbreak. Billions of aid dollars will be allocated to Africa.

Yet, according to the United Nations Office on Drugs and Crime, up to 25% of global procurement funding is lost to corruption. Such losses are prevalent in many African countries, where senior government officials and their international collaborators have used public policy and resources to enrich themselves.

Donated medicines intended for the poor have been stolen and resold for profit. Government procurement contracts have been manipulated and misused. Foreign-aid disbursements have been diverted to private accounts. In late March, a former health minister in the Democratic Republic of the Congo was sentenced to five years of forced labor for embezzling more than $400,000 from the DRC’s funds earmarked for responding to Ebola.

Most corrupt officials and business leaders, however, never see the inside of a prison cell. For them, stealing money meant for vulnerable populations is business as usual, and, given their powerful connections, punishment is often the furthest thing from their minds.

This may be all the more true during the COVID-19 crisis, because movement restrictions and office closures have hamstrung the anti-corruption work of oversight bodies, activists, and the press. If action is not taken soon, many African countries may face sharply higher death rates, not only from COVID-19, but also from inadequate economic support and social protections.

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Avoiding this outcome hinges on the credible threat of punishment for anyone caught stealing funds or otherwise disrupting COVID-19 response efforts for their own gain. Fortunately, mechanisms for doling out such punishments already exist: an array of tried-and-true financial policies by governments, multilateral institutions, and banks around the world.

In the United States, the Global Magnitsky Human Rights Accountability Act gives the Treasury Department’s Office of Foreign Assets Control (OFAC) the authority to impose sanctions on anyone who engages in public-sector corruption. Stealing, diverting, or obstructing resources meant for the COVID-19 response would fall neatly into this category.

OFAC has a truly global reach: given the US dollar’s global primacy, the vast majority of international financial transactions touch the US financial system. As a result, OFAC can effectively cut off entities from the international financial system.

The Financial Crimes Enforcement Network – the Treasury Department bureau tasked with combating domestic and international money laundering, terrorist financing, and other financial crimes – also has a key role to play. FinCEN advisories give banks guidance on filing suspicious-activity reports, which financial intelligence units can use to pursue corruption investigations. During the COVID-19 crisis, FinCEN can issue an anti-money-laundering advisory, warning banks worldwide to strengthen due diligence on suspicious financial transactions related to emergency public-health responses.

Likewise, banks operating in Africa can independently enhance their risk-assessment frameworks and transaction screening, in order to detect suspicious activity in pandemic-related funding streams. Since banks already screen for financial crimes, they would merely have to broaden their focus to suspicious activities involving senior government officials, companies in public-health procurement, and the broader health sector.

The Egmont Group of global financial intelligence units, of which FinCEN is a member, can collaborate to investigate diversions of public-health funding by corrupt actors. Although siphoned money usually crosses borders, the Egmont Group’s information-sharing agreements help to overcome this hurdle, facilitating international investigations.

Meanwhile, governments and financial institutions should do more to support the African civil-society groups, responsible businesses, and concerned officials who raise red flags and blow whistles on corruption. The evidence that these actors collect will facilitate legal action against networks of corrupt officials and businesspeople.

These solutions are not just theoretical; they have been used in South Sudan and the DRC, with encouraging results. The Israeli diamond dealer Dan Gertler made millions looting the DRC’s natural resources thanks to deals with corrupt officials, and laundered the money through the international banking system. But – armed with investigative dossiers by The Sentry (of which I am a co-founder with George Clooney), reports by Global Witness, and the work of investigative journalists – the US imposed sanctions on Gertler and his global network.

In South Sudan, anti-money laundering advisories from the US and UK governments have made moving the proceeds of corruption through the international financial system much more difficult. In fact, sanctions placed on key government officials and their commercial facilitators in the country – combined with those anti-money-laundering measures – have helped to push warring parties toward peace.

During a pandemic, there is a temptation to focus solely on protecting public health and fostering economic recovery. But failure to continue – and even intensify – the fight against corruption could severely undermine those efforts. Only by implementing credible consequences for corrupt-related disruption of COVID-19 responses can we ensure that government officials and business elites respond to the urgent needs of people, rather than profiting from their misery.

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With the new front runner for the Treasury, I don't think there will be any worries about any governmental/s tasking to prevent any OTHER financial crimes. Aren't they too busy creating them? With the support of BR and IS, no financial criminal has a worry. The only worry warts are all the US citizens with their name on any piece of paper that even looks like any thing close to a 401K, or pension fund. Those are all gonna get churnneled very advantageously for the TOTAL loss of any of those funds as they get grabbed up by the new privatized funds of guess who.

"BlackRock is the company behind the iShares family of ETFs. The company offers a large selection of more than 300 funds, which cover a wide range of both U.S. and international sectors and indexes, as well as other asset classes, such as bonds, real estate, and commodities."

Sentry is making hand over fist, and real distributions aren't reaching out very far from those fat fingers

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Mass protests over racial injustice, the COVID-19 pandemic, and a sharp economic downturn have plunged the United States into its deepest crisis in decades. Will the public embrace radical, systemic reforms, or will the specter of civil disorder provoke a conservative backlash?

For democratic countries like the United States, the COVID-19 crisis has opened up four possible political and socioeconomic trajectories. But only one path forward leads to a destination that most people would want to reach.

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